Voting cap

Agreements made in the Annual General Meetings of Shareholders of public limited companies, whereby the company's articles of association are modified to establish limitations on shareholders' voting rights (up to a certain percentage, regardless of the capital they hold) or to establish very strong majorities to modify these limitation agreements. The purpose of voting caps is to safeguard the composition of the Board of Directors and to ensure effective control of the company by a shareholder or group of shareholders, as a possible takeover bid could not prosper without their backing.